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SAS reports 2014 fourth quarter and year end results, increases reserves and resources, and announces a positive production decision for the Taylor Project

All dollar amounts are stated in Canadian dollars, unless otherwise indicated

TORONTO, Feb. 12, 2015 /CNW/ - St Andrew Goldfields Ltd. (T-SAS), ("SAS" or the "Company") incurred a net loss attributable to shareholders for Q4 2014 of $0.07 million or nil, on a per share basis, compared to net loss of $4.4 million, or $0.01 per share, in Q4 2013. Adjusted net earnings (1) for Q4 2014 was $0.1 million, or nil, on a per share basis as compared to an adjusted net loss (1) of $4.7 million or $0.01 share for Q4 2013.

For FY 2014, net loss attributable to shareholders was $8.8 million or $0.02 per share as compared to net loss of $5.0 million or $0.01 per share for FY 2013. The FY 2014 result includes a one-time non-cash impairment loss on the Aquarius Project of $13.1 million.

Adjusted net loss (1) for FY 2014 was $0.3 million, or nil, on a per share basis as compared to an adjusted net loss (1) of $5.4 million, or $0.01 per share, for FY 2013.

Q4 2014 and FY 2014 HIGHLIGHTS

Gold production - Production from the Holt and Holloway Mines in Q4 2014 was 22,643 ounces of gold, a decline of 7% from Q4 2013, as mining operations at the Hislop Mine ceased since mid-2014. FY 2014 production of 90,676 ounces of gold achieved the mid-range of the Company's 2014 production guidance.

Gold sold - Sold 20,744 ounces of gold in Q4 2014 at an average realized price (1) of US$1,202 per ounce for revenues of $28.4 million. Gold sales revenue of $124.0 million for FY 2014 decreased by $19.0 million or 13% from FY 2013 due to a 10% decline in gold price and the decrease in production.

Total cash cost per ounce of gold sold (1) - Mine cash costs decreased by 16% to US$706 per ounce for Q4 2013. In conjunction with a royalty cost of US$110 per ounce, total cash cost (1) for Q4 2014 was US$816 per ounce. For FY 2014 mine cash cost of US$738 per ounce of gold sold was below the Company's guidance.

All-in sustaining cost (AISC) (1) - Decreased by 11% or US$123 from Q4 2013 to US$1,042 per ounce of gold sold in Q4 2014. FY 2014, AISC of US$1,072 per ounce of gold sold, down by US$101 per ounce, when compared to FY 2013.

Cash margin from operations (1) - Increased by 18% from Q4 2013 to $9.2 million earned in Q4 2014. For FY 2014 SAS earned cash margin of $40.5 million, a decrease of $10.8 million as compared to $51.3 million for FY 2013, substantially due to a 10% decline in gold price.

Operating cash flow - SAS generated $7.6 million in operating cash flow for Q4 2014 as compared to $6.9 million in Q4 2013. Cash flow from operations for FY 2014 was $30.9 million, or $0.08 on a per share basis, as compared to $36.5 million or $0.10 per share in FY 2013. The Company was successful in controlling operational spending to adapt to the low gold price environment.

_______________________________

(1)

Refer to "Non-GAAP Measures" of this release for a discussion and the reconciliation of these non-GAAP measurements to the Company's 2014 Annual Financial Statements.

OUTLOOK FOR 2015

SAS is forecasting 2015 annual production of between 85,000 – 95,000 ounces of gold from Holt and Holloway with similar mine cash cost estimates as in 2014 of between US$750 and US$800 per ounce of gold sold.

The Company is also focused on bringing its wholly-owned Taylor Project towards commercial production by the end of 2015.

Capital budgets for 2015 of $26.0 million consist of the following:

Expressed in millions of Canadian dollars

Holt

$16.0

Holloway

0.9

Holt Mill

2.0

18.9

Taylor (net of gold sales during pre-production of $10.0)

7.0

Corporate and Other

0.1

$26.0

Exploration programs in 2015 will continue to focus on key targets at Holt Deep (Zone 4 Extension), Taylor, Holloway East Complex, the Hislop property, and several near mine targets at Holt and Holloway.

"2014 was a transitional year for SAS, where we saw a 30% increase in throughput at Holt, the extension of mine life at Holloway, and the depletion of open pit reserves at Hislop. Overall, we are proud of our production achievement this year and wish to thank our employees for their contribution throughout the year," said Duncan Middlemiss, President and CEO of SAS. "We are also pleased with the results of the Taylor second bulk sample and have made the decision to advance the project towards production. This represents a new mining front for the Company and we look forward to maximizing the potential at Taylor. Our exploration programs have delivered excellent results in 2014, and are the main contributor in the 25% increase in the year end Mineral Reserves and the 24% increase in the Inferred Mineral Resource category. We look forward to reporting on our progress in developing Taylor as our next mine and in other areas as 2015 advances."

Conference Call InformationA conference call will be held Friday, February 13, 2015 at 10:00 a.m. (EST) to discuss the fourth quarter and annual 2014 results. Participants may join the call via webcast at www.sasgoldmines.com or call in toll free at 1-866-212-4491. A playback of the conference call will be available via the website and will be posted within 24 hours of the call.

Mineral Reserves and Mineral Resources UpdateCompared to the December 31, 2013 Mineral Reserves Estimates, the December 31, 2014 Mineral Reserves Estimates increased from approximately 668,000 ounces of gold to approximately 833,000 ounces of gold. The net increase in Mineral Reserves, taking into account FY 2014 production of 90,676 ounces (97,725 ounces in-situ) depleted from 2013 Mineral Reserve Estimates, was approximately 263,000 ounces.

Compared to the December 31, 2013 Mineral Resources Estimates, the December 31, 2014 Mineral Resources Estimates have decreased by approximately 135,000 ounces of gold or 5% in the measured and indicated categories and increased by 1,065,000 ounces of gold or 98% in the inferred category. Most notably, the gain of just over 1 million of inferred ounces is due to the addition of new zones such as McKenna West, DL Zone, Zone 4 West, NBS, and Zone 4 Vertical at the Holt Mine.

SAS – Mineral Reserves Estimates (December 31, 2014)

Property

Proven

Probable

Proven + Probable

Tonnes('000)

Grade(g/t Au)

Ounces Au('000 oz)

Tonnes('000)

Grade(g/t Au)

Ounces Au('000 oz)

Tonnes('000)

Grade(g/t Au)

Ounces Au('000 oz)

Holt

1,452

4.26

199

2,414

5.05

392

3,866

4.75

591

Holloway

-

-

-

233

5.35

40

233

5.35

40

Taylor

-

-

-

774

6.27

156

774

6.27

156

Hislop

-

-

-

280

5.16

46

280

5.16

46

TOTAL

1,452

4.26

199

3,701

5.33

634

5,153

5.03

833

Notes:

a)

Mineral Reserves were estimated by Management according to CIM Definition Standards – November 2010;

b)

Mineral Reserves were estimated using a gold price of US$1,250 per ounce and an exchange rate of C$1.08 = US$1.00;

c)

Mineral Reserves for Holt were estimated using a "stope by stope" method at an averaged cut-off grade of 3.02 g/t Au;

d)

Mineral Reserves for Holloway were estimated using a "stope by stope" method at an average cut-off grade of 4.11 g/t Au;

e)

Mineral Reserves for Hislop were estimated using a "stope by stope" method at an average cut-off grade of 3.00 g/t Au for Thor;

f)

Mineral Reserves for Taylor were estimated using a "stope-by-stope" method with average cut-off grade of 3.48 g/t;

g)

Tonnes and gold ounce information is rounded to the nearest thousands. As a result, rows and columns may not add up exactly due to rounding.

h)

Work was done under the supervision of Keyvan Salehi, P.Eng., MBA, (SAS Sr. Director of Corp Dev & Tech Services).

SAS – Mineral Resources Estimates (December 31, 2014)

Project

Measured

Indicated

Measured + Indicated

Inferred

Tonnes('000)

Grade(g/t Au)

OuncesAu('000 oz)

Tonnes('000)

Grade(g/t Au)

OuncesAu('000 oz)

Tonnes('000)

Grade(g/t Au)

OuncesAu('000 oz)

Tonnes('000)

Grade(g/t Au)

OuncesAu('000 oz)

Holt

3,702

3.97

473

3,861

3.90

485

7,563

3.94

957

7,866

4.67

1,181

Holloway

310

4.71

47

482

4.54

70

792

4.61

117

2,479

4.88

389

Hislop

-

-

-

983

4.01

127

983

4.01

127

690

4.16

92

Taylor

-

-

-

2,323

4.76

356

2,323

4.76

356

1,951

4.10

257

Aquarius

-

-

-

22,300

1.29

926

22,300

1.29

926

9

0.79

0

Clavos

-

-

-

503

4.81

78

503

4.81

78

318

4.73

48

Ludgate

-

-

-

522

4.06

68

522

4.06

68

1,396

3.60

162

Canamax

-

-

-

240

5.09

39

240

5.09

39

170

4.26

23

TOTAL

4,012

4.03

520

31,214

2.14

2,149

35,227

2.36

2,668

14,879

4.50

2,154

Notes:

a)

Mineral Resources were estimated by Management according to CIM Definition Standards – November 2010;

b)

Mineral Resources for Holt, Holloway and Hislop used a US$1,250 per ounce gold price and an exchange rate of C$1.08 = US$1.00;

c)

Mineral Resources were estimated at a cut-off grade of 2.50 g/t Au with the exception of:

Mineral Resources for Aquarius are as of the 2012-2013 John Reddick Report & SRK Mining Study;

iii)

Mineral Resources for Clavos Project JV represent 40%, as per the option agreement with Sage Gold;

iv)

Clavos Resources were calculated by RPA as per the October 23, 2012 RPA Technical report;

d)

Tonnes and gold ounce information is rounded to the nearest thousands. As a result, rows and columns may not add up exactly due to rounding.

e)

Work was done under the supervision of D. Cater, P. Geo. (SAS VP-Exploration)

Mine Operations Review

Holt(see Operating and Financial Statistics – Holt Mine on page 15)Throughput at Holt increased by 48% in Q4 2014 when compared to Q4 2013 due to the increased mining rate. Throughout the year, total tonnes mined increased by 20% over the 2013 period from 1,000 tonnes per day in 2013 ("tpd") to 1,200 tpd. The increase in the mining rate throughout 2014, offset somewhat by the lower head grade, gave rise to a 6% increase in gold production in FY 2014, from 58,898 ounces to 62,633 ounces. Holt contributed 83% of the total cash margin from mine operations (1) earned during FY 2014 as compared to 76% for FY 2013.

Holloway (see Operating and Financial Statistics – Holloway Mine on page 16)Throughput at Holloway in Q4 2014 increased by 14% when compared to Q4 2013, and in conjunction with a 16% higher head grade, resulted in a 37% increase in gold production for Q4 2014. For FY 2014, production increased by 11% from FY 2013 reflecting in a 5% improvement in productivity, and a 6% higher head grade achieved in FY 2014 than FY 2013. Holloway contributed 15% of the total cash margin from mine operations earned during FY 2014 as compared to 12% for FY 2013.

Hislop(see Operating and Financial Statistics – Hislop Mine on page 17)The open pit mining operations at Hislop have ceased since Q2 2014 due to open pit reserves depletion. For FY 2014, 81,530 tonnes of remaining open pit ore (including low grade ore stock pile) were processed through the Holt Mill as compared to 333,097 tonnes of ore in FY 2013, which resulted in a 78% decline in production. For FY 2014, Hislop contributed 2% of the total cash margin from mine operations (1) earned as compared to 12% for FY 2013.

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(1)

Refer to "Non-GAAP Measures" of this release for a discussion and the reconciliation of these non-GAAP measurements to the Company's 2014 Annual Financial Statements.

Advanced Exploration Program - Taylor

The FY 2014 program consisted of approximately 2,000 m of ramp development and access towards the 1004 lens at the West Porphyry Zone ("WPZ"), underground diamond drilling and the extraction and processing of a 17,540-tonne bulk sample.

In addition, the Company completed the in-fill drill program of the 1004 lens which totaled (102) drill holes collared from drill bays located off the main ramp development on the 220m, 250m and 305m Sub level elevations, totaling 17,500 m. Additionally, 3,000 m of surface drilling was conducted. The assay results from the underground program have been consistent, illustrating better grade continuity and mineral widths than previously realized from surface drilling. Mineral resource expansion drilling demonstrates the potential to expand mineralization beyond the 1004 lens, both at depth and along the strike to the west.

In Q4 2014 and in January 2015, the Company processed a 17,540 tonne bulk sample at Taylor. The bulk sample achieved an average head grade of 9.01 g/t Au and a mill recovery of 97.4%. As a confirmatory measure and in support of generating more bulk sample data, 106 representative samples were collected from the bulk sample using a sample tower, prior to processing. The assay results of these samples returned an average head grade of 8.74 g/t Au, which correlated very well to the mill head grade of 9.01 g/t Au, a 3% variance.

The 2014 updated Mineral Reserves and Resource Estimates incorporate infill drill results completed at year end. In Q4 2014, the Company conducted geological modeling and technical work to update the resource model, as well as maintaining surface and ramp infrastructure. On February 12, 2015, a decision was made to advance the project into commercial production.

Exploration Programs

Exploration activities in FY 2014 were focussed on the near mine targets, specifically exploring for strike and depth extensions of the known mineralized zones and also exploring for potential repetitions and satellite zones situated near the operations. In particular, the key projects were the Holt Deep Zone 4 Extension which commenced in mid-2014, the continuation of drilling at the Holloway and Hislop properties. A total of 40,300 m of surface core and an additional 33,200 m of underground drilling were conducted in FY 2014.

Capital Resources

SAS generated $1.9 million in net cash flow (1) in FY 2014 as compared to $9.2 million in the prior year. The gold price in 2014 continued to negatively impact earnings and cash flow. As a consequence, working capital decreased by $4.2 million at the end of 2014 from a working capital of $13.8 million as at December 31, 2013. Despite this decline, the Company maintained a cash position of $21.5 million at the end of the year. The Company has access to additional cash resources by way of a US$10.0 million revolving credit facility. In conjunction with the expected cash flows from operations, the Company is well positioned to finance its planned sustaining capital programs, the growth capital required for Taylor and to conduct its planned exploration programs for 2015.

_______________________________

(1)

Refer to "Non-GAAP Measures" of this release for a discussion and the reconciliation of these non-GAAP measurements to the Company's 2014 Annual Financial Statements.

Qualified Person

Production at the Holt, Holloway and Hislop mines, processing at the Holt Mill, and mine development and production activities at the operations and evaluation activities at Taylor are conducted under the supervision of Marc-Andre Pelletier, P.Eng., the Company's General Manager of Operations.

Exploration activities on the Company's various mineral properties, including the drilling program at Taylor and the update of Mineral Resources is under the supervision of Mr. Doug Cater, P. Geo., the Company's Vice-President of Exploration.

Mineral Reserves were updated under the supervision of Mr. Keyvan Salehi, P. Eng., MBA, the Company's Senior Director, Corporate Development and Technical Services.

Messrs. Pelletier, Cater and Salehi are qualified persons as defined by NI 43-101, and have reviewed and approved this news release.

The following abbreviations are used to describe the periods under review throughout this release.

Abbreviation

Period

Abbreviation

Period

Q1 2014

January 1, 2014 – March 31, 2014

Q1 2013

January 1, 2013 – March 31, 2013

Q2 2014

April 1, 2014 – June 30, 2014

Q2 2013

April 1, 2013 – June 30, 2013

Q3 2014

July 1, 2014 – September 30, 2014

Q3 2013

July 1, 2013 – September 30, 2013

Q4 2014

October 1, 2014 - December 31, 2014

Q4 2013

October 1, 2013 - December 31, 2013

FY 2014

January 1, 2014 – December 31, 2014

FY 2013

January 1, 2013 – December 31, 2013

Non-GAAP Measures

The Company has included the following non-GAAP performance measures: adjusted net earnings; operating cash flow per share; net cash flow; average realized price per ounce of gold sold; total cash cost per ounce of gold sold; cash margin from mine operations; cash margin per ounce of gold sold; and mine-site cost per tonne milled throughout this press release, which do not have standardized meanings prescribed by International Financial Reporting Standards ("IFRS") and are not necessarily comparable to other similarly titled measures of other companies due to potential inconsistencies in the method of calculation. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, the Company and certain investors use this information to evaluate the Company's performance. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Refer to pages 9-14 of this press release for a discussion and the reconciliation of these non-GAAP measurements to the Company's 2014 Annual Financial Statements.

The unaudited Balance Sheets, Statements of Operations and Statements of Cash Flows for the Company for the three and twelve months ended December 31, 2014, can be found on pages 18-20.

To review the complete 2014 Annual Financial Statements and the Annual Management's Discussion and Analysis for 2014, please see the Company's SEDAR filings under the Company's profile at www.sedar.com or the Company's website at www.sasgoldmines.com.

_______________________________

(1)

Refer to "Non-GAAP Measures" of this release for a discussion and the reconciliation of these non-GAAP measurements to the Company's 2014 Annual Financial Statements.

About SAS

SAS (operating as "SAS Goldmines"), is a gold mining and exploration company with an extensive land package in the Timmins mining district, north-eastern Ontario, which lies within the Abitibi greenstone belt, the most important host of historical gold production in Canada.

SAS owns and operates the Holt and Holloway mines and is also advancing its Taylor Project into commercial production. The Company is conducting various exploration programs across 120km of land straddling the Porcupine-Destor Fault Zone.

FORWARD-LOOKING INFORMATION

This news release contains forward-looking information and forward-looking statements (collectively, "forward-looking information") under applicable securities laws, concerning the Company's business, operations, financial performance, condition and prospects, as well as management's objectives, strategies, beliefs and intentions. Forward-looking information is frequently identified by such words as "may", "will", "plan", "expect", "estimate", "anticipate", "believe", "intend" and similar words referring to future events and results, including the Company's production and cash cost guidance for 2015; the advancement of Taylor towards production and the time and the timing thereof; the Company's capital budgets and its exploration programs in 2015; and the sufficiency of the Company's capital resources to carry out its planned objectives. Also, Mineral Reserves and Mineral Resources are considered to be forward-looking information as they involve the assessment, based on certain estimates and assumptions, that such Mineral Reserves and Resources can be economically produced in the future.

This forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied by the forward-looking information. Factors that may cause actual results to vary materially include, but are not limited to, uncertainties relating to the interpretation of the geology, continuity, grade and size estimates of the mineral reserves and resources; unanticipated operational or technical difficulties which could escalate operating and/or capital costs and reduce anticipated production levels; the Company's dependence on key employees and changes in the availability of qualified personnel; fluctuations in gold prices and exchange rates; insufficient funding or delays or inability to raise additional financing on satisfactory terms if required; operational hazards and risks, including the inability to insure against all risks; changes in laws, regulations and the risks of obtaining necessary licenses and permits; changes in general economic conditions and changes in conditions in the financial markets. Such forward looking information is based on a number of assumptions, including but not limited to the level and volatility of the price of gold, the accuracy of reserve and resource estimates and the assumptions on which such estimates are based, the ability to achieve capital and operating cost estimates, the ability of the Company to retain and attract qualified personnel, the sufficiency of the Company's cash reserves and operating cash flow to complete planned development and exploration activities, the availability of additional financing on acceptable terms if and as required and the level of stability of general business and economic conditions. Should one or more risks and uncertainties materialize or should any assumptions prove incorrect, then actual results could vary materially from those expressed or implied in the forward-looking information and accordingly, readers are cautioned not to place undue reliance on this forward-looking information. SAS does not assume the obligation to revise or update this forwardlooking information after the date of this release or to revise such information to reflect the occurrence of future unanticipated events, except as may be required under applicable securities laws. A description of these risks and uncertainties are can also be found in the Company's Annual Information Form obtained on SEDAR at www.sedar.com.

NON-GAAP MEASURES

Adjusted net earnings (loss)Adjusted net earnings (loss) is a non-GAAP performance measure and does not constitute a measure recognized by IFRS and does not have a standardized meaning defined by IFRS, and may not be comparable to information in other gold producers' reports and filings. Adjusted net earnings (loss) is calculated by removing the gains and losses, resulting from the mark-to-market revaluation of the Company's gold-linked liabilities and foreign currency derivative contracts, one-time gains or losses on the disposition of non-core assets, periodic adjustments to the Company's asset retirement obligations, and expenses, asset impairment gains or losses and significant tax adjustments not related to current period's earnings, as detailed in the table below. The Company discloses this measure, which is based on its Financial Statements, to assist in the understanding of the Company's operating results and financial position.

Amounts in thousands of Canadian dollars, except per shareamounts

Q4 2014

Q4 2013

Q3 2014

FY 2014

FY 2013

Net income (loss) per Financial Statements

$

(67)

$

(4,365)

$

(7,499)

$

(8,816)

$

(5,018)

Reversal of unrecognized deferred income tax assets

-

-

-

-

(1,256)

Mark-to-market loss (gain) on gold-linked liabilities

55

(594)

(116)

340

(1,596)

Mark-to-market loss (gain) on foreign currency derivatives

(60)

91

280

(663)

1,065

Impairment loss on available-for-sale investments

-

67

-

-

567

Loss (gain) on disposal of fixed assets

-

-

(4)

145

-

Impairment loss

-

-

13,110

13,110

-

Write-down of mining equipment and investment

-

-

-

-

994

One-time accrual adjustment

-

-

(1,095)

(1,094)

-

Net change in provision

250

-

-

(527)

-

Tax effect of above items

(61)

126

(3,045)

(2,792)

(116)

Adjusted net earnings (loss)

$

116

$

(4,675)

$

1,631

$

(297)

$

(5,360)

Weighted average number of shares outstanding (000s)

Basic

368,296

368,295

368,296

368,296

368,270

Diluted

368,296

368,295

368,296

368,296

368,270

Adjusted net earnings (loss) per share - basic and diluted

$

(0.00)

$

(0.01)

$

0.00

$

0.00

$

(0.01)

Total cash cost per ounce of gold soldTotal cash cost per ounce of gold sold is a non-GAAP performance measure, which does not have a standardized meaning defined by IFRS and may not be comparable to information in other gold producers' reports and filings. The Company has included this non-GAAP performance measure throughout this document as the Company believes that this generally accepted industry performance measure provides a useful indication of the Company's operational performance. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate the Company's performance and ability to generate cash flow. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The following table provides a reconciliation of total cash costs per ounce of gold sold to production expenses per the Financial Statements for Q4 2014, Q4 2013, Q3 2014, FY 2014 and FY 2013:

Amounts in thousands of Canadian dollars, except whereindicated

Q4 2014

Q4 2013

Q3 2014

FY 2014

FY 2013

Mine site operating costs per Financial Statements

$

17,633

$

21,216

$

18,800

$

74,851

$

79,499

Less: Toll milling revenue

(992)

-

(1,230)

(2,491)

-

Production royalties per Financial Statements

2,599

2,720

2,735

11,109

12,208

Total cash costs

$

19,240

$

23,936

$

20,305

$

83,469

$

91,707

Divided by gold ounces sold

20,744

23,985

21,728

88,822

98,654

Total cash cost per ounce of gold sold (Canadian dollars)

$

928

$

998

$

935

$

940

$

930

Average 1 USD - CAD exchange rate

$

1.14

$

1.05

$

1.09

$

1.10

$

1.03

Total cash cost per ounce of gold sold (US$)

$

816

$

951

$

858

$

851

$

902

All-in sustaining cost per ounce of gold soldAll-in sustaining cost per ounce of gold sold is a non-GAAP performance measure, which does not have a standardized meaning defined by IFRS and may not be comparable to information in other gold producers' reports and filings. The Company has included this non-GAAP performance measure throughout this document as the Company believes that this generally accepted industry performance measure provides a useful indication of the Company's operational performance. Effective Q3 2013, the Company has adopted the all-in sustaining definition as set out in the guidance note released by the World Gold Council on June 27, 2013. All-in sustaining costs include mine-site operating costs and production royalties incurred at the Company's mining operations (net of toll milling revenue), sustaining capital expenditures, corporate administration expense, mine-site exploration costs, and reclamation cost accretion. The Company believes that this measure represents the total costs of producing gold from current operations, and provides the Company and other stakeholders with additional information that illustrates the Company's operational performance and ability to generate cash flow. This cost measure is reported on a consolidated level and on a per-ounce of gold sold basis. As the measure seeks to reflect the full cost of gold production from current operations, new project capital is not included. Certain other cash expenditures, including tax payments and financing costs are also not included.

Amounts in thousands of Canadian dollars, except whereindicated

Q4 2014

Q4 2013

Q3 2014

FY 2014

FY 2013

Mine site operating costs per Financial Statements

$

17,633

$

21,216

$

18,800

$

74,851

$

79,499

Less: Toll milling revenue

(992)

-

(1,230)

(2,491)

-

Production royalties per Financial Statements

2,599

2,720

2,735

11,109

12,208

Add (less):

Sustaining mine capital

3,790

3,255

3,243

15,304

14,416

Mine site exploration

388

335

289

1,110

5,501

Mine reclamation obligation

15

98

28

251

396

Corporate administration

1,135

1,703

1,210

5,109

7,148

All-in sustaining costs

$

24,569

$

29,327

$

25,075

$

105,244

$

119,168

Divided by gold ounces sold

20,744

23,985

21,728

88,822

98,654

All-in sustaining cost per ounce of gold sold (Canadian dollars)

$

1,184

$

1,223

$

1,154

$

1,185

$

1,208

Average 1 USD - CAD exchange rate

$

1.14

$

1.05

$

1.09

$

1.10

$

1.03

All-in sustaining cost per ounce of gold sold (US$)

$

1,042

$

1,165

$

1,060

$

1,072

$

1,173

Mine-site cost per tonne milledMine-site cost per tonne milled is a non-GAAP performance measure, which does not have a standardized meaning defined by IFRS and may not be comparable to information in other gold producers' reports and filings. As illustrated in the table below, this measure is calculated by adjusting Production Costs, as shown in the statements of operations for toll milling revenue and inventory level changes and then dividing by tonnes processed through the mill. Since total cash cost per ounce of gold sold data can be affected by fluctuations in foreign currency exchange rates, Management believes that mine-site cost per tonne milled provides additional information regarding the performance of mining operations and allows Management to monitor operating costs on a more consistent basis as the per tonne milled measure reduces the cost variability associated with varying production levels. Management also uses this measure to determine the economic viability of mining blocks. As each mining block is evaluated based on the net realizable value of each tonne mined, the estimated revenue on a per tonne basis must be in excess of the mine-site cost per tonne milled in order to be economically viable. Management is aware that this per tonne milled measure is impacted by fluctuations in throughput and thus uses this evaluation tool in conjunction with production costs prepared in accordance with IFRS. This measure supplements production cost information prepared in accordance with IFRS and allows investors to distinguish between changes in production costs resulting from changes in production versus changes in operating performance.

Cash margin from mine operationsCash margin from mine operations is a non-GAAP measure, which does not have a standardized meaning defined by IFRS and may not be comparable to information in other gold producers' reports and filings. It is calculated as the difference between gold sales and production costs (comprised of mine-site operating costs and production royalties) per the Company's Financial Statements. The Company believes it illustrates the performance of the Company's operating mines and enables investors to better understand the Company's performance in comparison to other gold producers who present results on a similar basis.

Amounts in thousands of Canadian dollars

Q4 2014

Q4 2013

Q3 2014

FY 2014

FY 2013

Gold sales per Financial Statements

[A]

$

28,391

$

31,707

$

30,430

$

123,967

$

142,983

Mine site operating costs per Financial Statements

17,633

21,216

18,800

74,851

79,499

Less: Toll milling revenue

(992)

-

(1,230)

(2,491)

-

Production royalties per Financial Statements

2,599

2,720

2,735

11,109

12,208

[B]

19,240

23,936

20,305

83,469

91,707

Cash margin from mine operations

[A] - [B]

$

9,151

$

7,771

$

10,125

$

40,498

$

51,276

Breakdown of cash margin from mine operations by mines:

Holt Mine

$

6,241

$

6,915

$

8,191

$

33,659

$

38,820

Holloway Mine

2,911

562

1,606

6,189

6,309

Hislop Mine

(1)

294

328

650

6,147

$

9,151

$

7,771

$

10,125

$

40,498

$

51,276

Average realized price per ounce of gold soldAverage realized price per ounce of gold sold is a non-GAAP measure, which does not have a standardized meaning defined by IFRS and is calculated by dividing gold sales proceeds received by the Company for the relevant period by the ounces of gold sold. It may not be comparable to information in other gold producers' reports and filings.

Amounts in thousands of Canadian dollars, except where indicated

Q4 2014

Q4 2013

Q3 2014

FY 2014

FY 2013

Gold sales per Financial Statements

$

28,391

$

31,707

$

30,430

$

123,967

$

142,983

Foreign exchange gain realized on the settlement of gold sales

(247)

(186)

(250)

(359)

(683)

Gain (loss) on foreign currency derivative cash flow hedges realized

183

244

13

582

650

$

28,327

$

31,765

$

30,193

$

124,190

$

142,950

Average 1 USD - CAD exchange rate

1.14

1.05

1.09

1.10

1.03

Gold sales recorded in US$

$

24,932

$

30,193

$

27,714

$

112,405

$

138,869

Divided by gold ounces sold

20,744

23,985

21,728

88,822

98,654

Average realized price per ounce of gold sold (US$)

$

1,202

$

1,259

$

1,275

$

1,266

$

1,408

Cash margin per ounce of gold soldCash margin per ounce of gold sold is a non-GAAP measure, which does not have a standardized meaning defined by IFRS and is calculated by subtracting the total cash cost per ounce of gold sold from the average realized price per ounce of gold sold. It may not be comparable to information in other gold producers' reports and filings.

Amounts in United States dollars

Q4 2014

Q4 2013

Q3 2014

FY 2014

FY 2013

Per ounce of gold sold:

Average realized price per ounce of gold sold

[A]

$

1,202

$

1,259

$

1,275

$

1,266

$

1,408

Total cash cost per ounce of gold sold

[B]

816

951

858

851

902

Cash margin per ounce of gold sold

[A] - [B]

$

386

$

308

$

417

$

415

$

505

Net cash flow

Net cash flow is a non-GAAP measure which does not have a standardized meaning defined by IFRS and is calculated by taking cash flow from operating activities less cash used in investing activities as reported in the Company's Financial Statements. It may not be comparable to information in other gold producers' reports and filings.

Amounts in thousands of Canadian dollars

Q4 2014

Q4 2013

Q3 2014

FY 2014

FY 2013

Cash flow from operating activities per Financial Statements

$

7,586

$

6,903

$

8,355

$

30,871

$

36,531

Less:

Cash used in investing activities per Financial Statements

5,888

4,128

6,943

28,926

27,359

$

1,698

$

2,775

$

1,412

$

1,945

$

9,172

Operating cash flow per shareOperating cash flow per share is a non-GAAP measure and is calculated by dividing cash flow from operating activities in the Company's Financial Statements by the weighted average number of shares outstanding for each year. It may not be comparable to information in other gold producers' reports and filings.

Amounts in thousands of Canadian dollars, except per shareamounts

Q4 2014

Q4 2013

Q3 2014

FY 2014

FY 2013

Cash flow from operating activities per Financial Statements

$

7,586

$

6,903

$

8,355

$

30,871

$

36,531

Weighted average number of shares outstanding (000s)

368,296

368,295

368,296

368,296

368,270

Operating cash flow per share

$

0.02

$

0.02

$

0.02

$

0.08

$

0.10

Operating and Financial Statistics – Holt Mine

Amounts in thousands of Canadian dollars, except per unitamounts

Q4 2014

Q4 2013

Q3 2014

FY 2014

FY 2013

Tonnes milled

120,721

81,791

101,826

442,108

369,657

Head grade (g/t Au)

4.05

5.42

4.82

4.65

5.22

Average mill recovery

94.8%

95.2%

95.5%

94.8%

95.0%

Gold produced (ounces)

14,908

13,579

15,087

62,633

58,898

Commercial gold production sold (ounces)

13,996

13,775

15,400

61,447

58,101

Gold sales revenue

$

19,153

$

18,239

$

21,572

$

85,787

$

84,271

Cash margin from mine operations (1)

$

6,241

$

6,915

$

8,191

$

33,659

$

38,820

Mine site cost per tonne milled (1)

$

96

$

114

$

108

$

101

$

100

Total cash cost per ounce of gold sold (US dollars) (1)

Mine cash costs *

$

692

$

636

$

669

$

640

$

607

Royalty costs

120

147

129

128

152

Total cash cost per ounce of gold sold (US dollars) (1)

$

812

$

783

$

798

$

768

$

759

Capital expenditures

$

3,274

$

2,991

$

2,699

$

13,654

$

12,965

Depreciation and depletion expense

$

3,531

$

2,602

$

3,299

$

12,373

$

10,316

* Toll milling revenue is allocated to each of SAS's mine operations

Note:

(1)

Total cash cost per ounce of gold sold, mine-site cost per tonne milled and cash margin from mine operations are non-GAAP measures and are not necessarily comparable to similarly titled measures of other companies due to potential inconsistencies in the method of calculation (see pages 9-14 for an explanation and reconciliation of non-GAAP measurements).

Operating and Financial Statistics – Holloway Mine

Amounts in thousands of Canadian dollars, except per unitamounts

Q4 2014

Q4 2013

Q3 2014

FY 2014

FY 2013

Tonnes milled

54,674

47,960

47,651

186,239

177,006

Head grade (g/t Au)

4.80

4.13

4.27

4.36

4.13

Average mill recovery

91.6%

88.9%

91.8%

91.2%

90.7%

Gold produced (ounces)

7,734

5,654

5,999

23,780

21,330

Commercial gold production sold (ounces)

6,745

5,105

5,356

22,433

21,147

Gold sales revenue

$

9,235

$

6,734

$

7,518

$

31,270

$

30,654

Cash margin from mine operations (1)

$

2,911

$

562

$

1,606

$

6,189

$

6,309

Mine site cost per tonne milled (1)

$

111

$

122

$

119

$

125

$

122

Total cash cost per ounce of gold sold (US dollars) (1)

Mine cash costs *

$

735

$

1,041

$

915

$

1,010

$

975

Royalty costs

90

111

99

108

143

Total cash cost per ounce of gold sold (US dollars)(1)

$

825

$

1,152

$

1,014

$

1,118

$

1,118

Capital expenditures

$

405

$

130

$

290

$

1,215

$

3,047

Depreciation and depletion expense

$

738

$

4,848

$

625

$

11,954

$

13,984

* Toll milling revenue is allocated to each of SAS's mine operations

Note:

(1)

Total cash cost per ounce of gold sold, mine-site cost per tonne milled and cash margin from mine operations, are non-GAAP measures and are not necessarily comparable to similarly titled measures of other companies due to potential inconsistencies in the method of calculation (see pages 9-14 hereof for an explanation and reconciliation of non-GAAP measurements).

Operating and Financial Statistics – Hislop Mine

Amounts in thousands of Canadian dollars, except per unitamounts

Q4 2014

Q4 2013

Q3 2014

FY 2014

FY 2013

Overburden stripped (m3)

-

19,646

-

-

127,547

Tonnes mined

(ore)

-

35,540

-

79,971

316,179

(waste)

-

377,627

-

223,712

1,348,216

-

413,167

-

303,683

1,664,395

Waste-to-Ore Ratio

-

10.6

-

2.8

4.3

Tonnes milled

-

98,293

1,747

81,530

333,097

Head grade (g/t Au)

-

1.96

1.76

2.12

2.19

Average mill recovery

-

81.6%

81.2%

76.8%

82.3%

Gold produced (ounces)

-

5,067

80

4,263

19,320

Commercial gold production sold (ounces)

2

5,105

972

4,942

19,406

Gold sales revenue

$

3

$

6,734

$

1,340

$

6,911

$

28,058

Cash margin from mine operations (1)

$

(1)

$

294

$

328

$

650

$

6,147

Mine site cost per tonne milled (1) (3)

$

-

$

69

$

100

$

67

$

67

Total cash cost per ounce of gold sold (US Dollars)(1)(2)(3)

$

1,708

$

1,202

$

957

$

1,147

$

1,096

Capital expenditures

$

-

$

-

$

-

$

-

$

20

Depreciation and depletion expense

$

-

$

2,186

$

88

$

289

$

12,026

Notes:

(1)

Total cash cost per ounce of gold sold, mine-site cost per tonne milled and cash margin from mine operations are non-GAAP measures and are not necessarily comparable to similarly titled measures of other companies due to potential inconsistencies in the method of calculation (see pages 9-14 hereof for an explanation and reconciliation of non-GAAP measurements).

(2)

Hislop is subject to a 4% net smelter return royalty, which includes a minimum advance royalty payment obligation (see "Gold-linked Liabilities" in the Company's Annual MD&A for 2014).

(3)

Net of toll milling revenue allocated to each of SAS's mine operations.